With San Diego as “Ground Zero,” Nissan Targets Pragmatic Car Buyers With Leaf EV—and We Take It for A Test Hum

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In the fall of 2008, I was green with cleantech envy when my colleague Greg Huang got to test drive a prototype Tesla Roadster, the luxury, all-electric sports car made by Silicon Valley’s Tesla Motors (NASDAQ: TSLA), which became a public company just last week.

But yesterday I turned over a new Leaf—and then I took it for a test drive through La Jolla.

As Greg was with the Tesla, I was struck by how eerily quiet Nissan’s compact, 100-percent electric vehicle (EV) is when it accelerates. It is so silent that there is little sense of speed; no engine revving, no whining RPMs. Even starting the Leaf can be deceiving. No engine cranking. Just push a button and it’s on.

Bruce Bigelow on test drive

The early production model of Nissan’s zero-emission Leaf EV arrived this week at Nissan Design America (the Japanese carmaker’s San Diego design center), the first stop in a cross-country media tour. Nissan plans to begin production of the compact hatchback EV in Japan later this year, and the first U.S. deliveries are expected here by December.

“San Diego is going to be ground zero for our launch,” says Nissan’s Mark Perry. “The whole country is going to be looking at what happens here.”

Mark Perry

Perry, who is director of product planning and advanced technology strategy for Nissan North America, says Nissan made San Diego its beachhead for reasons that include strong consumer demand, a supportive local utility (SDG&E), and support from state and local government.

As I explained last month, San Diego has emerged as a testbed for new EVs and the necessary electric charging infrastructure. It is among 11 metro areas slated to get EV charging stations under a $99.8-million matching grant the federal Department of Energy awarded last summer to Ecotality (NASDAQ: ECTY), a company based in Scotsdale, AZ, that specializes in EV charging infrastructure. Under the DOE program, Nissan is deploying close to 5,000 Leaf EVs in 11 metropolitan markets in five states. San Diego, the only California metro area enrolled in the program, is expected to get all 1,000 of California’s Leafs and close to 2,500 charging stations.

That doesn’t mean Leaf EVs won’t be available elsewhere in California or the U.S. for that matter. The Japanese carmaker plans to manufacture 50,000 Leafs during its first year of production, and those cars will be distributed for sale around the world, including Nissan dealers throughout the United States. But federal funding for installing the charging stations has been limited to the 11 metro areas in California, Oregon, Washington, Arizona, and Tennessee—and EVs are expected to proliferate more rapidly in those areas. Perry says he expects to sell 3,000 to 4,000 Leaf EVs in San Diego alone.

“You’ll see other EVs out there doing a hundred or 500 vehicles,” Perry says. “We’re doing tens of thousands of vehicles.”

About 15,000 people in the U.S. have paid a refundable $99 reservation fee that allows them to purchase a Leaf when the EV becomes available, according to Nissan. About 5,000 of those prospective buyers are in California, including more than 1,000 in San Diego.

Nissan says the compact Leaf hatchback seats five, but the car is so small, it’s really just a four-seater. The carmaker also says the Leaf EV has a top speed of 90 mph, and can go roughly 100 miles on one charge (depending on weather, temperature, and driving conditions). It is powered by a 24 kilowatt-hour (kWh) lithium-ion battery pack (which Nissan has been developing for roughly 18 years) that weighs 600 pounds and powers an 80-kilowatt AC synchronous electric motor.

The 2011 Nissan Leaf EV will be available in two versions, with the standard Leaf SV at a suggested retail price of $32,780. The premium Leaf SL costs $940 more, and is equipped with a small rooftop solar panel that provides a trickle charge for the battery back and a rear-facing camera that makes backing up easier. But Perry says the Leaf will be fully eligible for a maximum federal tax credit of $7,500, and the state of California also provides a “clean-vehicle” rebate of up to $5,000—which together could make the overall price of a standard Leaf EV as low as $20,280.

That compares to a base price of more than $100,000 for the Tesla, and as Perry frequently pointed out, Nissan developed the Leaf with much more pragmatic, value-based consumers in mind. “When we set out, we said we want to make this car a mass market car,” Perry says. “We want to make it mass affordable—an EV for everybody.”

Nissan Leaf control screen

Nissan has found that many of the consumers who have registered to buy a Leaf are early adopters. “They are the ones who also are standing in line for an iPad and a 4G phone,” Perry says. “But for the pragmatists, buying a Leaf has to make sense from a total cost of ownership perspective.” In this respect, Nissan calculates that a Leaf will cost almost $400 a year to charge (charging at 0.11 cents per kilowatt-hour, which works out to 0.026 cents per mile at 15,000 miles driven annually). In comparison, Nissan estimates that buying fuel for a car that gets 25 mpg costs about $1,800 a year (with gas priced at $3 a gallon, which works out to about 12 cents a mile to operate at 15,000 miles a year).

Other maintenance costs for the Leaf are minimal, Perry says. “There’s no oil to change. No fluids. All you have to do is maybe rotate your tires.”

I was impressed, and the current price makes the Leaf a compelling deal. The real question, of course, is whether the Leaf’s price will still seem as attractive to consumers after the federal tax credit ends. The tax credit is set to decrease as production ramps up, and it ends altogether once Nissan makes 200,000 Leaf EVs. As Perry put it, “Our job as we hit scale is to lower our costs so we can live in a world where the electric vehicle is affordable.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow